First impressions when Apple introduced the App Tracking Transparency feature in iOS 14.5

Apple's iOS 14.5 App Tracking Transparency disrupted digital advertising measurement. Alex Schultz, CMO and VP of Analytics at Meta, shares his candid first reaction to Apple's privacy changes and their strategic impact. He explains how Meta leveraged synthetic data modeling and predictive analytics to recover from reduced tracking capabilities. The conversation covers how privacy constraints forced stronger data science practices and ultimately made Meta's advertising platform more efficient with less user data. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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  Welcome to the Martech Podcast, a member of the I Hear Everything Podcast Network. In this podcast, you'll hear the stories of world-class marketers that use technology to drive business results and achieve career success. Here's the host of the Martech Podcast, Benjamin Shapiro.

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  I'm Benjamin Shapiro and joining me today is Alex Schultz, who is the CMO and VP of Analytics at Meta. Alex oversees global marketing, analytics and internationalization for the company's 3.4 billion daily users and was named one of Forbes' Most Influential CMOs in the world. And today, he's going to talk to us about his new book, The Art and Science of Digital Advertising, which is a deep dive into how creativity and analytics work together to drive growth in an AI-first world. All right, I want to move on to our next question, which honestly, I can't believe the PR team said, yes, I can ask this, but I'm excited to hear your answer. All right, I want you to close your eyes and get ready. And I want you to think back, it's been a couple of years now.

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  What was the first thing that you thought, what went through your head when Apple introduced the app transparency tracking feature in iOS 14.5?

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  Those smart cynical bastards. That was what went through my... I mean, they are so good, aren't they? There's the one side where it's like, you can be annoyed at them, but there's the other side where it's the game. They operate in China and yet they have a privacy brand, which in and of itself is just hilarious because I was part of the team that tried to get us into China.

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  It was a good track.

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  We can't operate a messaging system in China.

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  Yeah.

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  So that's interesting. And then on top of that, they go and bury in their menu that when it's them, it's personalization. But when it's anyone else, it's tracking? I mean, it's so smart and obviously they wanted to grow their services business. It's very high margin. It was a deliberate play. So I was like, hats off to you. I'm annoyed at you, but you smart cynical bastards.

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  Yeah, honestly, one of the first things that went through my head was, oh, man, Alex is going to have a rough week. There's a lot of unanswered questions when the flow of data comes in.

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  Well, you know, the person who did the analysis for this was on my team. His name is David Sasaki. He had a very rough weekend. I had a less rough weekend when this come out. He predicted it. The analysis, he was right. It was bang on. We presented it to the board. It was really good work. He's now the head of analytics for OpenAI.

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  There you go. And my understanding is it was a forcing function specifically at Meta to rely more on the concept of synthetic data. And the ad platform has still increased. What was the positive thing that came out of it?

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  The interesting thing we said at the time, I did an ad with Grace Jones, believe it or not, that talked about the impact of this on SMBs, which sometimes my life is very weird. We have the capabilities, the technology, the staff, the data to recover from a change like this. So what it did was it forced us to understand synthetic data more. It forced us to model things out more and it honestly made us smarter at doing things with less data, which in and of itself made us, I think, more privacy protecting in the work that we did. Because we're using more predicted data, we're using less data to do things. And so we have the capacity to do things with less data, which makes it more private.

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  Sometimes you have to go through the fire.

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  Yeah. And we came out stronger because of it. And I think the thing that's sad is a bunch of weaker companies actually got hurt more materially than the bigger platforms because Apple made it harder to do. Online tracking and conversion. Now, the good thing is I definitely think it killed some of the bad third-party data people. So there's swings and roundabouts. But yeah, it forced us to be leaner, fitter, better, and we came out a bit, I think, stronger, but it was really painful.

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  All right. That wraps up this episode of the Martech Podcast. Thanks for listening to my conversation with Alex Schultz, the CMO and VP of Analytics at Meta. If you'd like to contact Alex, you can find a link to his LinkedIn profile in our show notes or on martechpod.com. And of course, you could visit his company's website, which is meta.com. And his book launches in early October. So go ahead and get a copy. We'll have a link in our show notes for that as well. If you haven't subscribed yet and you want a daily stream of marketing and technology knowledge in your podcast feed, hit the subscribe button in your podcast app or on YouTube and we'll be back in your feed next week. All right. That's it for today. But until next time, my advice is to just focus on keeping your customers happy.

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